IG Design Group plc ( Design Group, the Company or the Group )

Transcription

1 The infrmatin cntained within this annuncement (the "Annuncement") is deemed by the Cmpany t cnstitute inside infrmatin as stipulated under the Market Abuse Regulatins (EU) N. 596/2014. Upn the publicatin f this Annuncement via Regulatry Infrmatin Service ("RIS"), this inside infrmatin is nw cnsidered t be in the public dmain. IG Design Grup plc ( Design Grup, the Cmpany r the Grup ) Acquisitin f Impact Innvatins, Inc. Placing f new Ordinary Shares t raise 50 millin Ntice f General Meeting Trading Update IG Design Grup plc, a leading designer, innvatr and manufacturer f celebratin, gifting, statinery and creative play prducts, is pleased t annunce that its whlly-wned subsidiary, IG Design Grup Americas, Inc. ("IG America") has entered int a cnditinal agreement t acquire 100 percent f the equity interest in Impact Innvatins, Inc. ( Impact Innvatins ), a leading supplier f gift packaging and seasnal décr prducts in the US, fr ttal cnsideratin f 56.5 millin n a cash and debt free basis (the Acquisitin ) representing a 4.9x Underlying EBITDA multiple with an additinal wrking capital and ther adjustment. In cnjunctin with the Acquisitin, the Cmpany is pleased t annunce a placing with institutinal investrs t raise up t 50 millin befre expenses (the Placing ) thrugh the issuance f up t 9,804,000 new rdinary shares f 5 pence each in the capital f the Cmpany ( Placing Shares ) at 510 pence ( Placing Price ) per Placing Share. The Placing was significantly versubscribed, with strng supprt frm bth new and existing institutinal sharehlders, and the Placing Price represents a discunt f 0.06 percent t the vlume weighted average price f pence fr the five days ended 24 August Of the ttal value f the Placing, apprximately 31.9 millin shall be used t satisfy the funding requirements in relatin t the Acquisitin and is nt subject t sharehlder apprval. Accrdingly, applicatin has been made fr 6,260,000 new rdinary shares f 5 pence each in the capital f the Cmpany ( First Tranche Placing Shares ) t be admitted t trading n AIM, and it is expected that admissin will ccur at 8.00 a.m. n 29 August The issuance f the remaining 3,544,000 Placing Shares ( Secnd Tranche Placing Shares ) is subject t sharehlder apprval at the General Meeting, and it is expected that admissin will ccur n 19 September Cmpletin f the Acquisitin is cnditinal n the successful admissin f the First Tranche Placing Shares and is expected t ccur n r arund 31 August The circular in respect f the Secnd Tranche Placing Shares is expected t be psted t sharehlders n 29 August Acquisitin Highlights Fr the year ended 31 December 2017, Impact Innvatins recrded Underlying EBITDA* f US$15.0 millin n revenues f US$155.9 millin and the directrs f Design Grup (the "Directrs") believe that the Acquisitin will: Create the wrld s largest cnsumer Gift Packaging business; Deliver significant earnings accretin in each f the next three financial years; Deliver annual synergies in excess f US$5.0 millin by year three; Enable expansin int the grwing and adjacent seasnal décr prduct categry bth in Nrth America and in established Design Grup markets arund the wrld;

2 Adds a cmplementary yet distinct custmer base, and lng-term relatinships with majr blue chip US retailers; Establish further scale within the USA t create a wrld class gift packaging manufacturing capability, leveraging established Grup knw-hw; and Deliver enhanced ne stp shp prduct and service slutins fr custmers. *earnings befre interest, tax, depreciatin, amrtisatin, excluding csts relating t Impact Innvatins histrical emplyee stck wnership plan and ther ne-ff csts. It is expected that the enlarged Grup s average leverage pst the Acquisitin and the Placing fr the year ended 31 March 2019 will be 1.3x Underlying EBITDA. Trading Update FY19 Design Grup is als pleased t cnfirm that trading in the current financial year t date has been strng and that the Grup s full year financial frecast remains in line with management expectatins. Paul Fineman, Chief Executive Officer f Design Grup, cmmented: The cmbinatin f Impact Innvatins with Design Grup nt nly dubles the scale f ur business in the Americas, it further enhances the verall perfrmance and grwth ptential f ur whle Grup whilst cntinuing t illustrate ur delivery f the Grup s stated strategy. We are delighted t be acquiring a business that has a strng track recrd f cnsistent rbust financial perfrmance and cash generatin thrugh prviding great prduct and categry management expertise t its custmers. As a cmbined Grup, we have a significant pprtunity t capitalise n ur nw enlarged scale and breadth f ffering t ur custmer base f many f the wrld s largest and mst successful retailers. Tgether, we will enhance ur scpe fr future develpment, bth rganically and thrugh carefully cnsidered acquisitins, building n the strng fundatins that have been laid and taking Design Grup t its next exciting level f grwth. Jhn Dammermann, Chief Executive Officer f Impact Innvatins, cmmented: I, alng with ur team at Impact Innvatins am very excited t be jining Design Grup, a business with an impressive track recrd and great mmentum. Tgether we have even greater pprtunity fr future grwth and I lk frward t cntinuing t play a key rle in delivering nging success within the Americas and thrughut the verall Grup. Management will be hsting an analyst call at 08:30 this mrning. T register please cntact designgrup@almapr.c.uk. A vide verview frm CEO Paul Fineman is available t watch here:

3 Fr further infrmatin, please cntact: IG Design Grup plc Tel: Paul Fineman, Chief Executive Giles Willits, Chief Financial Officer Cenks Securities plc Tel: Stephen Keys Harry Hargreaves Alma PR Tel: Rebecca Sanders-Hewett Susie Hudsn Sam Mdlin Backgrund t and strategic ratinale fr the Acquisitin The Cmpany has stated previusly that it wuld seek t create value thrugh bth rganic grwth and well cnsidered acquisitins. The Directrs have fr sme time been aware f Impact Innvatins and are nw delighted t annunce that the Grup has secured the Acquisitin, which they believe presents significant pprtunities fr the Grup. In particular, the Directrs believe that the Acquisitin will create the wrld s largest cnsumer gift packaging business, which will allw the Grup t: Expand int the grwing seasnal décr prduct categry; Establish scale within the USA as well as leading capability in gift packaging manufacturing by leveraging the Grup s knw-hw; Deliver enhanced ne stp shp prduct and service slutins fr custmers; Leverage Impact Innvatins and Design Grup s existing custmer relatinships t target crss-selling pprtunities in the lnger term; Achieve estimated annual synergies in excess f US$5.0 millin by the third year f wnership; Deliver significant earnings accretin in each f the next three years. It is estimated that the cmbined business will accunt fr apprximately 22 percent f the verall cnsumer gift packaging market in the USA and Canada and have the ability t build its share further in the grwing seasnal fabric and décr market. Abut Impact Innvatins Funded in 1968 and emplying mre than 250 staff glbally, Impact Innvatins is a designer, manufacturer and distributr f seasnal and special ccasins prducts specialising in paper, fabric and décr. The Cmpany is headquartered in Clara City, Minnesta, where its fabric and décr business is lcated, and its gift wrap manufacturing, warehusing and distributin facilities are lcated in Memphis, Tennessee. Impact Innvatins has additinal manufacturing peratins in Shaxing, China and ffices in Hng Kng. Impact Innvatins has lng-term relatinships with majr US retailers, including Walmart, Shpk, Target, Krger, and Meijer all f which have been in place fr in excess f 20 years. In particular, the Directrs have been impressed by the strength and depth f the relatinship that Impact Innvatins has with its largest custmer, Walmart, which is expected t accunt fr ver 15 percent

4 f ttal Grup turnver fllwing the Acquisitin. Impact Innvatins has received multiple supplierrelated awards fr its service t custmers, including frm Walmart. Fr the year ended 31 December 2017, Impact Innvatins recrded Underlying EBITDA* f US$15.0 millin and prfits befre tax f US$7.1 millin n revenues f US$155.9 millin and, as at 31 December 2017, had grss assets f US$73.5 millin. *earnings befre interest, tax, depreciatin, amrtisatin, excluding csts relating t Impact Innvatins histrical emplyee stck wnership plan and ther ne-ff csts Cnsideratin The Cmpany s ttal funding requirement in relatin t the Acquisitin is 84.4 millin**. Of this 56.5 millin** represents the debt free/cash free purchase price, with the balance used t fund a wrking capital and ther adjustment which is the result f the business being acquired during its peak wrking capital perid. Funds used in respect f the wrking capital and ther adjustment are expected t be repaid within 3 mnths f the transactin cmpleting frm Impact Innvatins perating cash flws. The Cmpany s funding requirements in respect f the Acquisitin will be satisfied thrugh the net prceeds f the First Tranche Placing Shares, the issuance at the Placing Price f new rdinary shares f 5 pence each in the capital f the Cmpany with an aggregate value f $20 millin (the Cnsideratin Shares ), and thrugh the extensin f the Grup s existing debt facilities. The number f Cnsideratin Shares t be issued shall be calculated n the basis f the prevailing exchange rate n 30 August 2018, being the day immediately prir t the expected cmpletin date f the Acquisitin. It is expected that the enlarged Grup s average leverage, pst the Acquisitin and Placing fr the year ending 31 March 2019 will be 1.3x Underlying EBITDA. The Cnsideratin Shares are being issued t Jhn Dammermann, Chief Executive Officer f Impact Innvatins, and persns clsely assciated with him, and are subject t a phased mnth lck-in fllwed by a twelve-mnth rderly market in respect f each tranche. Mr Dammermann is entering int a new service cntract as part f the Acquisitin and will remain with the cmbined business. **based n a freign exchange rate f US$1.30: 1 The Placing The Cmpany prpses t raise 50 millin grss prceeds ( 48.3 millin net f expenses ("Net Prceeds")) frm the issue f the Placing Shares at the Placing Price thrugh Cenks Securities plc ("Cenks") pursuant t: (i) a cnditinal agreement dated 27 August 2018 in relatin t the First Tranche Placing Shares; and (ii) a cnditinal agreement dated 27 August 2018 in relatin t the Secnd Tranche Placing Shares. The Placing is nt cnditinal upn cmpletin f the Acquisitin, and is nt underwritten. The First Tranche Placing Shares shall be used satisfy the funding requirements in relatin t the Acquisitin and is nt subject t sharehlder apprval. The Secnd Tranche Placing Shares will be subject t sharehlder apprval f related reslutins at the General Meeting. Use f prceeds f the Placing The Net Prceeds f the Placing will be used t: satisfy in part the funding requirements in respect f the Acquisitin; and

5 fund the capital expenditure f the enlarged grup and prvide resurces t capitalise n ther pprtunities in line with its strategy which the Directrs expect t arise. General Meeting A General Meeting t cnsider and apprve the Secnd Tranche Placing Shares will be held at IG Design Grup plc, 7 Water End Barns, Evershlt, Bedfrdshire MK17 9EA, United Kingdm at a.m. n 17 September A circular will be psted t sharehlders n 29 August 2018 and will be made available n the Cmpany's website at Ttal Vting Rights Applicatin has been made fr the First Tranche Placing Shares and Cnsideratin Shares t be admitted t AIM, and it is expected that admissin f the First Tranche Placing Shares and Cnsideratin Shares will becme effective at 8.00 a.m. n r arund 29 August 2018 and 4 September 2018 respectively. Fllwing admissin f the First Tranche Placing Shares, the Cmpany s issued rdinary share capital will cmprise 71,258,394 rdinary shares, nne f which are held in treasury. Therefre, the ttal number f rdinary shares with vting rights in the Cmpany fllwing admissin f the Placing Shares will be 71,258,394. Further annuncements will be made n the ttal vting rights fllwing the admissin f the Cnsideratin Shares and the admissin f the Secnd Tranche Placing Shares. The abve figure may be used by sharehlders as the denminatr fr the calculatins by which they will determine if they are required t ntify their interest in, r a change t their interest in, the Cmpany under the FCA's Disclsure Guidance and Transparency Rules. Recmmendatin The Bard believes that the Secnd Tranche Placing Shares is in the best interests f the Cmpany and its sharehlders. Accrdingly, the Bard recmmends Sharehlders t vte in favur f the reslutins t be put t the General Meeting as they intend s t d in respect f their beneficial sharehldings amunting t 28,796,476 r 44.3% f the existing rdinary shares. EXPECTED TIMETABLE OF PRINCIPAL EVENTS Annuncement f the Acquisitin and Placing Admissin and cmmencement f dealings f the First Tranche Placing Shares Psting f General Meeting Circular Admissin and cmmencement f dealings f the Cnsideratin Shares Latest time and date fr receipt f Frms f Prxy General Meeting Admissin and cmmencement f dealings f the Secnd Tranche August 29 August 29 August 4 September a.m. n 13 September a.m. n 17 September 8.00 a.m. n 19 September

6 Placing Shares if the Reslutins are passed The Secnd Tranche Placing Shares credited t CREST stck accunts if the Reslutins are passed Despatch f definitive share certificates fr Secnd Tranche Placing Shares if the Reslutins are passed 19 September week cmmencing 24 September Ntes: (i) References t times in this Annuncement are t Lndn time (unless therwise stated). (ii) If any f the abve times r dates shuld change, the revised times and/r dates will be ntified by an annuncement t an RIS. IMPORTANT INFORMATION This Annuncement includes statements that are, r may be deemed t be, "frward-lking statements". These frward-lking statements can be identified by the use f frward-lking terminlgy, including the terms "believes", "estimates", "plans", "anticipates", "targets", "aims", "cntinues", "expects", "intends", "hpes", "may", "will", "wuld", "culd" r "shuld" r, in each case, their negative r ther variatins r cmparable terminlgy. These frward-lking statements include matters that are nt facts. They appear in a number f places thrughut this Annuncement and include statements regarding the Directrs' intentins, beliefs r current expectatins cncerning, amngst ther things, the Grup's results f peratins, financial cnditin, liquidity, prspects, grwth, strategies and the industries in which the Grup perates. By their nature, frward-lking statements invlve risk and uncertainty because they relate t future events and circumstances. A number f factrs culd cause actual results and develpments t differ materially frm thse expressed r implied by the frward-lking statements, including, withut limitatin: ability t find apprpriate investments in which t invest and t realise investments held by the Grup; cnditins in the public markets; the market psitin f the Grup; the earnings, financial psitin, cash flws, return n capital and perating margins f the Grup; the anticipated investments and capital expenditures f the Grup; changing business r ther market cnditins; changes in plitical r tax regimes, exchange rates and clients; and general ecnmic cnditins. These and ther factrs culd adversely affect the utcme and financial effects f the plans and events described herein. Frward-lking statements cntained in this Annuncement based n past trends r activities shuld nt be taken as a representatin that such trends r activities will cntinue in the future. Subject t any requirement under the Prspectus Rules, the Disclsure Guidance and Transparency Rules, the AIM Rules r ther applicable legislatin r regulatin, neither the Cmpany nr Cenks undertake any bligatin t update r revise any frward-lking statements, whether as a result f new infrmatin, future events r therwise. Investrs shuld nt place undue reliance n frward-lking statements, which speak nly as f the date f this Annuncement. N statement in this Annuncement r incrprated by reference int this Annuncement is intended t cnstitute a prfit frecast r prfit estimate fr any perid, nr shuld any statement be interpreted t mean that earnings r earnings per share will necessarily be greater r lesser than thse fr the relevant preceding financial perids fr the Cmpany. This Annuncement cntains infrmatin regarding the Cmpany's business and the markets in which it perates and cmpetes, which the Cmpany has btained frm varius third party surces. Where infrmatin has been surced frm a third party it has been accurately reprduced and, s far as the Cmpany is aware and is able t ascertain frm the infrmatin published by that third

7 party, n facts have been mitted which wuld render the reprduced infrmatin inaccurate r misleading. Such infrmatin has nt been audited r independently verified. Certain data in this Annuncement, including financial, statistical and perating infrmatin, has been runded. As a result f runding, the ttals f data presented in this Annuncement may vary slightly frm the actual arithmetic ttals f such data. Percentages have als been runded and accrdingly may nt add t 100 percent. This Annuncement is fr infrmatin purpses nly and shall nt cnstitute an ffer t buy, sell, issue, r subscribe fr, r the slicitatin f an ffer t buy, sell, issue, r subscribe fr any securities, nr shall there be any sale f securities in any jurisdictin in which such ffer, slicitatin r sale wuld be unlawful prir t registratin r qualificatin under the securities laws f any such jurisdictin. This Annuncement has been issued by and is the sle respnsibility f the Cmpany. N representatin r warranty, express r implied, is r will be made as t, r in relatin t, and n respnsibility r liability is r will be accepted by Cenks r by any f its affiliates r agents as t, r in relatin t, the accuracy r cmpleteness f this Annuncement r any ther written r ral infrmatin made available t r publicly available t any interested party r its advisers, and any liability therefre is expressly disclaimed. Cenks, which is a member f the Lndn Stck Exchange, is authrised and regulated in the United Kingdm by the Financial Cnduct Authrity and is acting as nminated adviser and brker fr the purpses f the AIM Rules fr Cmpanies exclusively fr Design Grup in cnnectin with the matters referred t in this Annuncement and fr n-ne else and will nt be respnsible t anyne ther than Design Grup fr prviding the prtectins affrded t the clients f Cenks nr fr prviding any advice in relatin t the cntents f this Annuncement r any transactin, arrangement r matter referred t herein. The respnsibilities f Cenks, as nminated adviser, are wed slely t the Lndn Stck Exchange and are nt wed t the Cmpany r t any directr r any ther persn and accrdingly n duty f care is accepted in relatin t them. This Annuncement has been issued by and is the sle respnsibility f the Cmpany. N representatin r warranty, express r implied, is r will be made as t, r in relatin t, and n respnsibility r liability is r will be accepted by Cenks r by any f its affiliates r agents as t, r in relatin t, the accuracy r cmpleteness f this Annuncement r any ther written r ral infrmatin made available t r publicly available t any interested party r its advisers, and any liability therefre is expressly disclaimed. The distributin f this Annuncement in certain jurisdictins may be restricted by law. N actin has been taken by the Cmpany r Cenks that wuld permit pssessin r distributin f this Annuncement in any jurisdictin where actin fr that purpse is required. Persns int whse pssessin this Annuncement cmes are required by the Cmpany and Cenks t infrm themselves abut, and t bserve such restrictins. Neither the cntent f the Cmpany's website nr any website accessible by hyperlinks n the Cmpany's website is incrprated in, r frms part f, this Annuncement.